Sydney Morning Herald columnist

Workers comp ... lawyers were up in arms about being cut out of the game as a way of creating disincentives for claimants. Photo: AFR

An old legal acquaintance of mine got in touch by email.

''I have read your articles on somewhat esoteric subjects … however I wonder if you might care to write something about an issue of real significance to the average person'' - i.e. recent amendments to the Workers Compensation Act.

The message was pretty clear. Forget Julian Assange and all those bleeding heart issues and wake-up to yourself.

Amid myriad world shattering issues jostling for attention, it is now the turn of workers compensation to get its place on the opinion page.

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These changes in NSW were inevitable as soon as Barry O'Farrell and his crew got their ample backsides on the Treasury leather.

There were a couple of driving forces, one of which is that the Coalition ideologically prefers employers to workers, the other being a $4 billion black hole in the scheme administered by WorkCover.

One way of fixing the hole would have been to jack up the premiums payable by employers to their insurers. That looked unattractive because employer lobby outfits started screaming about the thousands of people who would be sacked if the cost of workers compensation coverage went up.

Obviously, the far more attractive approach was to conjure a variety of ways to squeeze injured workers until the pips squeaked.

The genesis of today's problems goes back to Bob Carr's era in 2001. The agency, WorkCover, against the advice of other ''stakeholders'' in the system, decided to cut off lump sum payments to the injured and impaired.

Instead, everyone would have to take weekly compo payments.

Fast forward 11 years and WorkCover insists the scheme is in dire need of changing because, shock horror, weekly payments are out of control.

The remedy, therefore, is to make claiming for weekly benefits arising out of workplace injuries as unattractive as possible. But the ways of achieving this outcome are brutal.

A system is invented of non-appealable assessments by the insurers of injured workers' capacity. In other words, the people who hold the money decide whether an injured worker is entitled to receive the money.

The decision by the insurer about capacity to earn is final and binding. The Workers Compensation Commission, which used to arbitrate on these things, is expressly excluded.

About 40 per cent of the work of the commission used to be deciding entitlements to continuing weekly payments.

That process has been transferred to the insurance companies, so no prizes for guessing who has the upper hand.

Procedural processes are reviewable but not the merits of a decision, which sounds a bit like the Ruddock-era refugee laws.

For the great number of workers there will be no entitlement after 2½ years of weekly payments and no medical expenses after 12 months from then.

Workers suffering permanent impairment as a result of injury are now retrospectively denied any compo unless their level of impairment is at least 11 per cent.

That's a massive leap from the previous requirement of 1 per cent impairment and of itself will deny 60 to 70 per cent of the injured from receiving any payment for pain and suffering and continuing treatment.

An insurer does not have to pay medical expenses if the treatment has not been approved in advance, unless the treatment is provided within 48 hours of the injury occurring. There are a whole lot of other get-out clauses, but essentially it means you'll probably have to ring the claims manager before you ring the ambulance.

There's no room to have these expenses covered when the injury manifests some time after the accident occurred.

Eligibility for payments arising from heart attacks and strokes, diseases contracted at work and journey-related injuries have all been put beyond reach, except in the starkest of cases.

Then there's the daddy of them all, legal costs. As a result of an amendment conjured by the Christian Democrats and the Shooters in the upper house, and supported by the government,workers instead of insurers will have to pay their own legal costs in connection with work capacity reviews.

Further, in making a claim for compensation in the first place, each party is to bear their own costs.

Again, this transfers the balance of power to the insurers and makes a nonsense of the right to review of an insurer's decision.

Unsurprisingly, lawyers were up in arms about being cut out of the game as a way of creating disincentives for claimants.

It's why one lawyer with 40 years experience in the workers compensation business tells me, ''this is the most vicious, nasty and unjust piece of legislation I have ever seen''.

Certainly, the Nile amendment still stands and it makes accessing the system more difficult.

In the good old days, workers comp lawyers used to make a feast of the process by stacking up multiple claims in the court, earning generous fees for each case, most of which shared similar facts, and then retired to lunch for the rest of the day.

It was one of the great doozies of the law and in part is responsible for the venal mindset of some personal injury lawyers - that the system is there to be easily milked.

As a last-minute repair job, this week the government announced it would create a panel of ''independent'' lawyers to provide a free service in reviewing insurance company decisions.

The legal profession was not quite sure how to respond. The bar association said it was an ''incomplete solution'' and wanted to know how much money would be funneled from insurers into this legal assistance scheme.

Greens MP David Shoebridge put his finger on the problem, saying the system would reward lawyers chosen by the government who served the interests of WorkCover.

Put another way, there's nothing like free lawyers to stir the anxiety of expensive lawyers.

48 comments

Workcover was always intended to make it cheaper for employers to ensure that workers were not injured at work, and where that failed, to compensate injured workers and ensure they got appropriate medical and social care.

These aims have been slowly eroded by government after government, making a joke (a very rewarding joke for the insurers) of the system.

Clearly, the only people not being looked after are the injured workers... what a surprise!

Commenter

Michel Dignand

Location

Wagga Wagga

Date and time

September 28, 2012, 9:06AM

Michel D....You are quintessentially, absolutely & totally right

But its our own fault, we keep voting in governments that favour the wealthy & entitled, now O'Barrel & co. have an unassailable majority they are laughing their a...s off at all the little people and what do we do....nothing!

They keep changing legislation to screw all the little folks like with workers comp next is eminent domain to screw you out of your home then comes electricity....then education & health budgets.

These type of governments sit back and say all the little worms have had it too good for too long let's punish them.

Commenter

Justintime

Date and time

September 28, 2012, 9:59AM

Good points.......these changes have taken us back to dark ages. Worker's have to pay their own legal fees, less compensation. All industries are effeced but some of the worst cases are in the ploice force, fire fighters, health sector (nurses).....not to forget the every day workers. This is just a grab from the least that can afford it back into the pockets of big business.........it's a disgrace. There have been a number of deaths just recently because of un-safe work practices. These compnaies should be fined big time & the families should be compensated at a fair & resonable level.

Commenter

Bazza

Date and time

September 28, 2012, 10:37AM

There's no question that a few people abused the system, but the solution is not to cut out help to those who need it. That is just unjust. This makes it less of an incentive for employers to stick to safe work practices. This money they saved will be built upon the bodies of their workers, but that's nothing new.

Commenter

Knee Jerk

Location

Sydney

Date and time

September 28, 2012, 9:11AM

Workers Comp has never been a level playiing field. Why? Because corporations have a foothold. Insurance companies are some of the biggest rip-off merchants in the history of commerce. You pay a price for a promise of an intangible at a future date which may or not even be relevant at the time of inception. Although rates of WComp are set by gov't, you cannot tell me that the insurance companies dont charge for administering the WComp Act. Everything is wunderbar if you are paying your premiums, yet, as soon as you make a claim, your premiums will rise above and beyond the cost of maintaining the injured party - effectively making the whole system just a farce. And now, to circumvent the overseeing authority so that the insurance companies call the shots - is just wrong. I would advocate for the abolition of Workers Comp as most of the things covered by these premiums are the same as Public Liability anyway. Furthermore, in an effort to streamline WComp across the country, the legislation was emended, however the rates weren't adjusted across the board - so as the result being that a variance of up to 8% of wages can exist in WComp in Albury and Wodonga for example - creating a further unfair and inequitable playing field - all in the name of streamlining??. Big joke.

Commenter

Snidery Mark

Date and time

September 28, 2012, 9:27AM

We could consider scrapping the WC system rather than handing over power to the insurers by reinstating the right of workers to sue (without limitation) for their actual losses including restoring an element for some very real pain and suffering.

I know business interests will cry poor over this suggestion but we don't have all these restrictions on recovery when it's some silvertail's defamation suit.

Commenter

hungrygg

Date and time

September 28, 2012, 10:10AM

You could probably do that via existing Public Liability - allowing the employee to claim against their employers' public liability insurance rather than jump thru the hoops of the WComp legislation. Whenever an outside source (in this case insurance companies) becomes involved in the interpretation or administration of legislation - there will never be agreement. It's like that adage - if there's more than one person involved, no-one gets the blame...

Commenter

Snidery Mark

Date and time

September 28, 2012, 10:27AM

Actually public liability would be a disaster for workers, because you would have to prove legally the employer was directly at fault in every case. In practise, thats almost impossible.

You would also have the problem where an accident is partly caused by another worker, and not the employer.

Commenter

enno

Location

sydney

Date and time

September 28, 2012, 12:34PM

If you have actually seen some of the fallacious claims that are made by "injured" workers, particularly in construction, then you would understand that the system has been rorted long enough. Psychological injury is the best way to demonstrate the fraud that is perpetrated by workers and backed up by psychologists who are there simply to perpetuate their own industry.

Commenter

G

Location

Brisbane

Date and time

September 28, 2012, 9:39AM

And yet G, I know a paramedic injured on the job who is now homeless because of these changes. He can no longer drive, has hugely restricted arm movement and the insurers and Workcover are holding him to ransom refusing rehabilitative therapy.

His only recourse is legal action that is now beyond his means.

There's a better way to catch the frauds than by handing the eligibility decisions to the big boys